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Management can act confidently Improve operational efficiency Give the enterprise the edgeit needs to succeed Even small and medium business (SMB) units are using ERP software to achieve a competitive advantage.
Efficiency is improved
Reduce manual work No more inefficient paper-based business processes
ERP makes the organization paperless, or shall we say less-and less paper. Thus becoming more efficient.
Increase sales.
Better tracking of inventories. More accurate order fulfillment. Better customer service. Vendor relationship management (VRM)
FG inventory control
ERP has resulted in a faster response / delivery time. For example, in the legacy system the Invoice preparing was cumbersome and was taking lot of time In ERP, now users are making CCI (Challan-cumInvoice), in a very efficient manner, which is not only faster but also ensures accuracy
Stock is updated automatically when the item is purchased and sold. This results in ensuring that the stock figures are always up-to-date. Correct response to customer about delivery commitment is now possible.
Pre-sales
Quotation Automation has resulted in proper costing and capturing overheads The Sales Order is automatically created after the quotation approval and subsequently the Work Order is printed for the Production giving information about the proper raw material (or child items) requirement.
BOM
The Bill Of Material (BOM) master is automatically updated in the Sales Order stage resulting into greater accuracy of Item Master and very useful for MRP Material Requirement Planning.
ERP Implementation
How and why of ERP failure & tips for successful implementation
Education
Not understanding what the new 'system' is designed to achieve). At least 100 hrs of training is required for key users. Preparing masters / transaction on practice databases to get the comfort level and singing off is highly recommended. The CEO can make this happen, if he / she personally take interest, otherwise if left to users, the quality training does not happen and then chances of success are reduced
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was live. Users were busy with ISO implementation and most people saw the data entry screen for the first time when the legacy was removed.
If the owner is not spending enough quality time, then the ERP project is likely to be unsuccessful
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In one organization, the MD hardly took part in the discussion with ERP vendor and delegated the task to the General Manager, who in turn never wanted the ERP system, so he created all the roadblocks, and the vendor got frustrated and finally left
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SRS
Inadequate SRS or System Requirements Specification: Current processes are not adequately addressed. User must write down the requirements, which means taking out time and extra effort. The user usually explains casually, verbally, and hurriedly, then how the ERP can succeed? z If sufficient time is not given for preparing the SRS, ERP is likely fail z Chopping and changing of program codes after the ERP goes Live is observed, if SRS exercise is not done properly
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Internal Resistance
Resistance to changing the 'old' processes. This is perhaps human nature
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Unless proper confidence building is done (during training) the user will still want to use the old method (or the legacy way)
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One ERP user (in a company) was so adamant that the MD had to ask him to resign (and he was the works manager who was expert in fire fighting, but MD wanted to prevent fire altogether).
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Give me moon
zUnrealistic
Expectations of the
Benefits
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must draw a line, be satisfied, at least in the first phase, and let the system take off.
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ROI can be reducing inventory level by x percentage or ROI can be preparing of Excise (TAX) Invoice quickly
and accurately planning.
Most users do not know even, what the ROI is For example
Time Frame
Unrealistic Time Frame Expectations. ERP is like changing the wall itself (and not changing merely the paint of the wall) z CEO / CFO expect things to happen overnight when they have not taken trouble to define (in writing); to what extent customization will be allowed z One has to learn to put a full stop to chopping and changing.
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TCO - Money
Total Cost of Ownership is not understood z ERP vendor money is not paid in time z The ERP implementing company is treated like any other supplier and ERP project goes into a kind of negative cycle z E.g., Think of a mobile phone:
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When the SIM card to be charged bystops charge is over it working and needs paying
additional amount.
ERP project is taken as by-the-way project; whereas in true sense it should be the only priority during implementation phase.
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A Bottom-Up approach is employed (the Process is not viewed as a Top management priority).
In other words if architect has not shown the door and window, the room will not have them. Due importance to these documents should be given. For instance, ERP has many different types of sales invoice and several types of purchase vouchers, but which one is applicable in a particular business is known to that businessperson only. Some time should be spent in the test run known as CRP run. Later, modification will not only cost in term of money but also time. Moreover, that time blame game starts and project suffers. It is strongly recommended that all key users take the POC (Proof of Concept) seriously
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System Requirement Specification (SRS) should be reflected in the reference guidelines. Every page of this Business Blueprint document should be signed.
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Later, after six months, he realized his mistake and asked to provide for the link
Sometime Director or CEO of the company does not share his or her long-term vision of the company, with the middle management or lower management.
It is necessary to identify yourself and map the same with the scope of ERP modules.
Write it down from the scope list of ERP modules given by ERP vendor.
It is like using a car instead of bullock cart. A poor implementation could end up with major delays in outbound shipments or even stoppages
blessing. However, this comes only when all stakeholders (users) and ERP implementation team follows proper implementation methodology.
DAILY BACKUP
Make a disaster management plan. Nobody wishes that accident should happen. Nevertheless, it is necessary to have a written document in place. Especially, mention about the backup and restore procedure. Do a rehearsal exercises.
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Keep backup CD (or DVD) in physically separate location, e.g. take to another office or another building (safe deposit locker)
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User may have to enter data all over again in case of server breakdown
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Do not get carried away by impressive PowerPoint presentations. Marketing people are trained to give Rosy picture. The chief of ERP (main sponsor) should know the limitation of ERP and its customization ERP implementers cannot deliver Moon. Although sales team will promise Moon and Jupiter also.
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Business transformation is a painful process. Do not underestimate. It is like that scene of Jurassic Park II movie. She is amused when she is looking at the Dinosaurs for the first time. She is told that in beginning, it is always wah wah but it ends up in screaming!
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